A market intelligence firm says that the total amount of Ethereum (ETH) staked has more than doubled in the year leading up to the top altcoin’s much-anticipated merge.
According to crypto insights firm Arcane Research, the total amount of staked ETH has seen over a 100% increase from 6.5 million to 13.4 million in the last year despite the leading smart contract platform taking a 51% drop in price.
ETH’s transition from a proof-of-work mechanism to a proof-of-stake one will considerably alter how the blockchain operates as it will rely on validators to secure the network rather than token miners.
“Scheduled for September 15, the merge is fast approaching and will drastically change Ethereum’s economy. Instead of miners securing the network, it will rely on validators staking ETH to the network, allowing them to run block-producing nodes and earn staking yields.”
Arcane Research’s data reveals that roughly 10% of Ethereum’s total supply has been staked in anticipation of the merge.
The crypto analytics company goes on to debunk fear centered around a massive dump of ETH after the ability to withdraw staked Ethereum becomes unlocked. Currently, staked ETH tokens are locked in place and cannot be moved.
“Because staking is high risk, the vast majority of ETH remains unstaked, but when withdrawals are unlocked (scheduled for 2023, after the merge), yield play might be the safest macro play…
At this stage, staked ETH are locked and cannot be withdrawn for an unknown period. But contrary to the ‘massive unlock dump FUD (fear, uncertainty, and doubt), the ability to withdraw is a major de-risking event that should lead to a net increase in the demand for staking. Increased liquidity for staking positions – more willingness to stake.”
ETH is changing hands for $1,635 at time of writing, a 7% gain on the day.
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